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Today, several financial leaders are meeting with the Senate’s banking committee to discuss the $700 billion bailout of Wall Street that is being proposed to congress. Federal Reserve Chairman Ben Bernanke, U.S Treasury Secretary Henry Paulson, Securities and Exchange Commission (SEC) Chairman Christopher Cox and the Director of the Federal Housing Finance Agency James Lockhart are appearing before the committee to lay out their plan and to answer the committee’s tough questions.

Led by Sen. Chris Dodd, the committee has taken turns scrutinizing the plan, trying to get a grip on what effect it would have on the economy and taxpayers money. The plan would essentially let financial companies of all sizes take toxic securities off of their books. This would help their balance sheets and relieve the strain on many companies that are struggling to survive. As a result banks should be able to lend more money and possibly loosen up their standards. These experts hope that this will also cause private investors to start pumping money back in to these companies.

The proposed bill is only thee pages long but includes a tremendously large amount of taxpayers money. At this point Paulson and Bernanke have been vague about the specifics. The reason is due to the enormous complexity of these securities. They do stress that this must be done very soon.

A large concern from the committee is that this plan does not include any legislation about helping homeowners facing foreclosure stay in their homes. Paulson and Bernanke believe that this plan will help homeowners, although right now there is no direct legislation indicating this help. In other words, the average homeowner would not directly benefit, but as a trickle down effect since it would help banks free up money to loosen lending practices. This would in turn help to jumpstart our ailing housing market.

Although this plan won’t help every problem we have with our financial system, if the plan is passed and works, this will be a fast and great step at helping our economy as a whole get through this tough time.